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Abstract:
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"In 1995, the Office of Technology Assessment (OTA) observed, '[C]hoosing the means or policy instruments to meet environment goals . . . can be a surprisingly complex task for decision-makers . . . .' Kenneth Richards' article, Framing Environmental Policy Instrument Choice, offers a powerful way to address this complexity. His multi-factored analytical framework for deciding which instrument has the best chance of minimizing PC+IC +TX (the 'constrained optimization formula') is new to the literature. Moreover, his situation-specific analysis provides useful new insights, including:
* the greater attractiveness of incentive-based instruments where the range of technology options is greatest or applications are varied;
* the tendency of measurement costs (a subset of implementation costs) to rise as the realm of private party discretion in instrument choice increases;
* the desirability of paying interest on saved allowances; and
* the characterization of 'voluntary' regulation as an example of the 'Calabresian role' for government (i.e., assignment of property rights and liability rules), which reveals that this instrument is subject to the same pitfalls as relying on the market, private bargaining, or private litigation to reduce pollution."
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